Australia: Abolition of NSW mortgage and transfer duties deferred

In brief - Abolition of duties deferred indefinitely

The NSW Treasurer confirmed as part of the State Budget delivered on 18 June 2013 the indefinite deferral of the abolition of mortgage duty, transfer duty on non-land business assets and transfer duty on non quoted marketable securities.

Future abolition date to be proclaimed by Governor

These State duties had been scheduled to be abolished on 1 July 2013.

Abolition will now occur on an unspecified future "abolition date" appointed by the Governor by proclamation.

Deferral to affect commercial and corporate transactions

The deferral of abolition of these types of duties will affect the following types of common commercial and corporate transactions with the relevant NSW connection:

• secured financing transactions where security is granted over real estate or personal property
• transfers of, or declarations of trust made in respect of shares in proprietary and unlisted public companies, units in unit trusts and certain business assets
• corporate restructures

Deferring abolition of duties to raise additional revenue

The Treasurer stated that the deferral was necessary to help fund in part the state's share ($1.7 billion) of the initiatives of the Gonski National Education Agreement entered into between the O'Farrell state government and the Gillard federal government.

According to the State Budget papers, the deferral will result in additional state revenue of $334 million over the 2012/2013 tax year.

The Treasurer also stated in the State Budget that the need to retain these types of duties will be reassessed when the low value GST import threshold is lowered.

It is estimated in the State Budget papers that if this threshold was lowered from the present $1,000, the state's share of GST revenue would be $1.2 billion.

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